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Changes to the ESSSuper investment options

April 24 2024

We have made some changes to the nine investment options available to ESSSuper members who have an Accumulation Plan, Beneficiary Account, Working Income Stream, or Retirement Income Stream. These changes came into effect on 19 October 2021.

The changes are to:

  • Investment return objectives of seven investment options
  • Investment risk objectives of five investment options
  • Strategic Asset Allocations and Strategic Asset Allocation ranges of eight investment options.

1. Change to investment return objectives

The ESSSuper Board reviews the Fund’s long-term investment strategy annually, including considering the appropriateness of each investment option’s return objectives. At the last investment strategy review, the Board approved changes to the return objectives of the following investment options:

  1. High Growth
  2. Growth
  3. Balanced
  4. Conservative
  5. Defensive
  6. Basic Growth
  7. Ethically Minded.

The changes follow exceptionally strong returns which have resulted in many of the investment options significantly exceeding their return objectives. The unusually strong returns of the last financial year are not expected to be maintained in the future.

Accumulation Plan, Beneficiary Account, and Working Income Stream

Changes to the investment return objectives for all investment options in the Accumulation Plan, Beneficiary Account, and Working Income Stream are outlined below.

  Return objectives to 18 October 2021 after fees and taxes Return objectives from 19 October 2021 after fees and taxes
Shares Only (no change) CPI + 4.0% over a 12 year period CPI + 4.0% over a 12 year period
High Growth CPI + 4.25% over a 12 year period CPI + 4.0% over a 12 year period
Growth CPI + 3.5% over a 10 year period CPI + 3.0% over a 10 year period
Balanced CPI + 2.5% over a 10 year period CPI + 2.0% over a 10 year period
Conservative CPI + 1.5% over a 5 year period CPI + 1.0% over a 5 year period
Defensive CPI + 0.5% over a 2 year period CPI over a 2 year period
Cash (no change) Equivalent to or higher than the Bloomberg AusBond Bank Bill Index Equivalent to or higher than the Bloomberg AusBond Bank Bill Index
Basic Growth CPI + 3.5% over a 10 year period CPI + 3.25% over a 10 year period
Ethically Minded CPI + 3.5% over a 10 year period CPI + 3.0% over a 10 year period

Retirement Income Stream

Changes to the investment return objectives for all investment options in the Retirement Income Stream are outlined below.

  Return objectives to 18 October 2021 after fees Return objectives from 19 October 2021 after fees
Shares Only (no change) CPI + 4.5% over a 12 year period CPI + 4.5% over a 12 year period
High Growth CPI + 4.75% over a 12 year period CPI + 4.5% over a 12 year period
Growth CPI + 4.0% over a 10 year period CPI + 3.5% over a 10 year period
Balanced CPI + 3.0% over a 10 year period CPI + 2.5% over a 10 year period
Conservative CPI + 2.0% over a 5 year period CPI + 1.5% over a 5 year period
Defensive CPI + 1.0% over a 2 year period CPI over a 2 year period
Cash (no change) Equivalent to or higher than the Bloomberg AusBond Bank Bill Index Equivalent to or higher than the Bloomberg AusBond Bank Bill Index
Basic Growth CPI + 4.0% over a 10 year period CPI + 3.75% over a 10 year period
Ethically Minded CPI + 4.0% over a 10 year period CPI + 3.5% over a 10 year period

2. Change to investment risk objectives

The ESSSuper Board reviews the Fund’s long term investment strategy annually, including considering the appropriateness of each investment option’s risk objectives. At the last investment strategy review, the Board approved changes to the risk objectives for the following investment options:

  1. Shares Only
  2. Growth
  3. Balanced
  4. Conservative
  5. Defensive.

The changes to risk objectives reflect developments in financial markets rather than any changes to how the fund invests on behalf of its members.

Accumulation Plan, Beneficiary Account, Working Income Stream, and Retirement Income Stream

Changes to the investment risk objectives for all investment options in the Accumulation Plan, Beneficiary Account, Working Income Stream, and Retirement Income Stream are outlined below.

  Risk bands to 18 October 2021 Risk bands from 19 October 2021
Shares Only 6 - High 7 - Very High
High Growth (no change) 6 - High 6 - High
Growth 5 – Medium to High 6 - High
Balanced 4 - Medium 5 – Medium to High
Conservative 3 - Low to Medium 4 - Medium
Defensive 2 - Low 3 - Low to Medium
Cash (no change) 1 - Very Low 1 - Very Low
Basic Growth (no change) 6 - High 6 - High
Ethically Minded (no change) 6 - High 6 - High

3. Change to Strategic Asset Allocations and Strategic Asset Allocation ranges

The Strategic Asset Allocations (SAAs) and Strategic Asset Allocation (SAA) ranges for the following investment options have been adjusted:

  1. Shares Only
  2. High Growth
  3. Growth
  4. Balanced
  5. Conservative
  6. Defensive
  7. Basic Growth
  8. Ethically Minded.

The new SAAs and SAA ranges are expected to improve the likelihood of investment options meeting their risk and return objectives over the long term.

Changes to the SAAs and the SAA ranges for all investment options in the Accumulation Plan, Beneficiary Account, Working Income Stream, and Retirement Income Stream are outlined below.

Shares Only investment option

  SAAs and ranges to 18 October 2021 SAAs and ranges from 19 October 2021

SAA (%) Ranges (%) SAA (%) Ranges (%)
Australian Equities (no change) 40.0 25 - 75 40.0 25 - 75
International Equities (no change) 60.0 25 - 75 60.0 25 - 75
Private Equity N/A N/A 0.0 0 - 10
Property N/A N/A N/A N/A
Infrastructure N/A N/A N/A N/A
Alternative Strategies N/A N/A N/A N/A
Multi-Asset Strategies N/A N/A N/A N/A
Credit N/A N/A N/A N/A
Defensive Fixed Income N/A N/A N/A N/A
Cash N/A N/A N/A N/A

High Growth investment option

  SAAs and ranges to 18 October 2021 SAAs and ranges from 19 October 2021

SAA (%) Ranges (%) SAA (%) Ranges (%)
Australian Equities 29.5 10 - 40 29.5 20 - 50
International Equities 42.0 20 - 55 41.0 20 - 55
Private Equity (no change) 0.0 0 - 10 0.0 0 - 10
Property 7.0 0 - 30 6.0 0 - 30
Infrastructure 13.0 0 - 30 8.0 0 - 30
Alternative Strategies 4.5 0 - 15 5.5 0 - 15
Multi Asset Strategies (no change) 0.0 0 - 20 0.0 0 - 20
Credit (no change) 4.0 0 - 15 4.0 0 - 15
Defensive Fixed Income N/A N/A 2.5 0 - 10
Cash N/A N/A 3.5 0 - 10

Growth investment option

  SAAs and ranges to 18 October 2021 SAAs and ranges from 19 October 2021

SAA (%) Ranges (%) SAA (%) Ranges (%)
Australian Equities 21.0 5 - 30 21.0 10 - 40
International Equities 26.0 10 - 40 22.5 10 - 40
Private Equity (no change) 0.0 0 - 10 0.0 0 - 10
Property 9.0 0 - 20 7.0 0 - 20
Infrastructure 12.0 0 - 25 7.5 0 - 25
Alternative Strategies 4.0 0 - 15 6.0 0 - 20
Multi Asset Strategies 4.0 0 - 25 0.0 0 - 25
Credit (no change) 12.5 0 - 30 12.5 0 - 30
Defensive Fixed Income 8.0 0 - 20 13.5 0 - 20
Cash 3.5 0 - 15 10.0 0 - 20

Balanced investment option

  SAAs and ranges to 18 October 2021 SAAs and ranges from 19 October 2021

SAA (%) Ranges (%) SAA (%) Ranges (%)
Australian Equities 11.5 5 - 25 11.5 0 - 30
International Equities 20.0 5 - 30 15.5 5 - 30
Private Equity (no change) 0.0 0 - 10 0.0 0 - 10
Property 9.0 0 - 20 6.0 0 - 20
Infrastructure 11.5 0 - 25 6.5 0 - 25
Alternative Strategies (no change) 4.5 0 - 15 4.5 0 - 15
Multi Asset Strategies 5.0 0 - 25 0.0 0 - 25
Credit 12.5 0 - 30 11.0 0 - 30
Defensive Fixed Income 16.0 5 - 40 26.5 5 - 40
Cash 10.0 0 - 25 18.5 0 - 25

Conservative investment option

  SAAs and ranges to 18 October 2021 SAAs and ranges from 19 October 2021

SAA (%) Ranges (%) SAA (%) Ranges (%)
Australian Equities 6.0 0 - 15 6.0 0 - 20
International Equities 10.5 0 - 15 8.5 0 - 20
Private Equity (no change) 0.0 0 - 5 0.0 0 - 5
Property 6.0 0 - 15 4.0 0 - 15
Infrastructure 9.0 0 - 20 4.5 0 - 20
Alternative Strategies 0.0 0 - 6 3.0 0 - 15
Multi Asset Strategies 11.0 0 - 30 0.0 0 - 30
Credit 9.0 0 - 15 9.0 0 - 25
Defensive Fixed Income 15.0 0 - 30 20.0 0 - 30
Cash 33.5 15 - 55 45.0 15 - 55

Defensive investment option

  SAAs and ranges to 18 October 2021 SAAs and ranges from 19 October 2021

SAA (%) Ranges (%) SAA (%) Ranges (%)
Australian Equities 3.0 0 - 10 3.0 0 - 15
International Equities 5.0 0 - 10 4.0 0 - 15
Private Equity N/A N/A 0.0 0 - 5
Property 3.0 0 - 10 2.0 0 - 10
Infrastructure 4.0 0 - 10 2.5 0 - 10
Alternative Strategies N/A N/A 2.0 0 - 10
Multi Asset Strategies 7.0 0 - 25 0.0 0 - 25
Credit (no change) 5.0 0 - 10 5.0 0 - 10
Defensive Fixed Income 25.0 0 - 40 28.0 0 - 40
Cash 48.0 30 - 80 53.5 30 - 80

Cash investment option

  SAAs and ranges to 18 October 2021 SAAs and ranges from 19 October 2021

SAA (%) Ranges (%) SAA (%) Ranges (%)
Australian Equities N/A N/A N/A N/A
International Equities N/A N/A N/A N/A
Private Equity N/A N/A N/A N/A
Property N/A N/A N/A N/A
Infrastructure N/A N/A N/A N/A
Alternative Strategies N/A N/A N/A N/A
Multi Asset Strategies N/A N/A N/A N/A
Credit N/A N/A N/A N/A
Defensive Fixed Income N/A N/A N/A N/A
Cash (no change) 100.0 100 100.0 100

Basic Growth investment option

  SAAs and ranges to 18 October 2021 SAAs and ranges from 19 October 2021

SAA (%) Ranges (%) SAA (%) Ranges (%)
Australian Equities 26.5 5 - 35 26.5 10 - 50
International Equities 37.5 10 - 50 33.0 10 - 50
Private Equity N/A N/A N/A N/A
Property 7.0 0 - 20 5.0 0 - 20
Infrastructure 11.0 0 - 25 6.0 0 - 25
Alternative Strategies 0.0 0 - 10 1.5 0 - 15
Multi Asset Strategies (no change) 0.0 0 - 30 0.0 0 - 30
Credit (no change) 7.5 0 - 25 7.5 0 - 25
Defensive Fixed Income 7.5 0 - 20 10.0 0 - 20
Cash 3.0 0 - 15 10.5 0 - 15

Ethically Minded investment option

  SAAs and ranges to 18 October 2021 SAAs and ranges from 19 October 2021

SAA (%) Ranges (%) SAA (%) Ranges (%)
Australian Equities (no change) 26.0 15 - 50 26.0 15 - 50
International Equities (no change) 34.0 15 - 50 34.0 15 - 50
Private Equity N/A N/A N/A N/A
Property (no change) 5.0 0 - 20 5.0 0 - 20
Infrastructure (no change) 0.0 0 - 20 0.0 0 - 20
Alternative Strategies 5.0 0 - 20 15.0 0 - 20
Multi Asset Strategies 10.0 0 - 20 0.0 0 - 20
Credit (no change) 0.0 0 - 20 0.0 0 - 20
Defensive Fixed Income (no change) 15.0 0 - 30 15.0 0 - 30
Cash (no change) 5.0 0 - 20 5.0 0 - 20

What you need to do

You do not need to do anything as a result of these changes.

All of the changes came into effect on 19 October 2021 and the details are in the ESSSuper Accumulation Plan, Beneficiary Account, and Income Streams Product Disclosure Statements (PDSs) available on the PDS and handbooks page of our website.

If you would like to change your investment option(s), it’s easy to do through Members Online.

 

Emergency Services Superannuation Board (ABN 28 161 296 741) (ESSB), the Trustee of the Emergency Services Superannuation Scheme (ABN 85 894 637 037)  (ESSSuper).

Normal terms and conditions and waiting periods apply. The information contained in this document is of a general nature only. It should not be considered as a substitute for reading ESSSuper's Product Disclosure Statement (PDS) that contains detailed information about ESSSuper products, services and features. Before making a decision about an ESSSuper product, you should consider the appropriateness of the product to your personal objectives, financial situation and needs. It may also be beneficial to seek professional advice from a licensed financial planner or adviser. An ESSSuper PDS is available at esssuper.com.au/pds or by calling 1300 650 161.

Investment returns cannot be guaranteed as investment markets can be volatile. As a consequence, returns can be positive or negative. Past investment performance is not a reliable indicator of future performance. Benefits in ESSSuper’s Accumulation Plan, Income Streams and Beneficiary Account products are not guaranteed or underwritten by the Victorian Government or ESSSuper, and ESSSuper does not come under the jurisdiction of the Australian Financial Complaints Authority. ESSSuper comes under the jurisdiction of the Victorian Civil and Administrative Tribunal.